Despite investing more than $600 million in Bangladesh’s energy sector in the past five years, the Asian Infrastructure Investment Bank did not spend a single penny on green and clean energy in the country, finds a study titled “Financing Fossil Fuels Failing Our Future”.
Bangladeshi climate groups Bangladesh Working Group on External Debt (BWGED) and Coastal Livelihood and Environmental Action Network (CLEAN), Manila-based NGO Forum on ADB, Amsterdam-based Recourse and Berlin-based Urgewald jointly published the report of the study virtually on Wednesday.
The report reveals AIIB’s continuous, controversial investment in fossil fuel in Bangladesh.
AIIB’s investment in Bangladesh is experiencing a staggering year-on-year growth of 23 per cent.
“This report reveals a critical reality check. Not a single investment in the energy sector in Bangladesh has been used towards meeting the ‘last mile’ needs of local communities through decentralised renewables; instead the AIIB’s so-called ‘infrastructure for tomorrow’ has not only wreaked havoc on the livelihoods of local people but also left a trail of flawed, corrupt or non-existent consultation processes”, said the report co-author Tanya Lee Roberts-Davis.
The report found that local communities in Bhola are still awaiting compensation for land acquisition while the operating company Nutan Bidyut Bangladesh Ltd showed unprecedented irresponsibility as disposal of sand and debris from the construction site blocked a local canal causing flooding of croplands.
The report also pointed out that AIIB is directly facilitating coal power dependency by connecting the coal-fired plants of the Chattogram-Cox’s Bazaar area with the national grid through constructing 27-km overhead and underground transmission lines.
“AIIB breaches its own policies for not financing coal through financing transmission lines in the Chattogram zone. It also violated its safeguard policies by not disclosing the project information and giving inadequate compensation. The bank has to compensate the people for its irregularities as there is no court to sue the bank”, said Professor Shamsul Alam, Energy Adviser of the Consumers Association of Bangladesh (CAB).
“AIIB shareholders like the UK are pledging to stop funding fossil fuels but keep backing fossil fuel in climate-vulnerable Bangladesh through AIIB. Not one of AIIB’s energy investments in Bangladesh supports renewables. This is unacceptable in a time of climate crisis. Time’s up AIIB – finance out of fossils now,” said Petra Kjell, Campaign Manager Recourse.
According to the report, AIIB is a post-Paris agreement multilateral development bank committed to align its finance flow with the objectives of the Paris agreement.
In May this year, AIIB amended its Environment and Social Framework with an aim to better help its clients make progress on their contributions to the Paris Climate Agreement and achievement of the sustainable development goals.
However, this policy apparently doesn’t reflect on its practice.